WATCH: The first shipment of LNG from the Ichthys project's Darwin processing plant has departed for Japan.

The West Australian

VideoWATCH: The first shipment of LNG from the Ichthys project's Darwin processing plant has departed for Japan.

The $US40 billion Ichthys project that delivered its first LNG to Japan this week is mired in multibillion-dollar contractual disputes between operator Inpex, chief contractor JKC and many subcontractors.

US engineer KBR, a JKC joint venture member with Japan’s JGC and Chiyoda, revealed the full extent of the problems in a filing this week to the US Securities and Exchange Commission.

JKC, of which KBR has a 30 per cent stake, was awarded the contract to build the Darwin LNG plant in early 2012 with the first LNG scheduled for 2016. KBR chief financial officer Mark Sopp told analysts this week that it had claims of about $US950 million against Inpex for changes to the project, equivalent to a $US3.2 billion total claim from the joint venture.

Last month an arbitration ruling that Inpex was liable for subcontractors’ costs from delays resulted in KBR receiving $US330 million of its claims.

KBR chief executive Stuart Bradie said JKC had a number of legal cases against Inpex.

“We're hoping, with the customer now producing LNG and the venture starts to get cash as a consequence, we can sit down with the customer and actually conclude a negotiated settlement,” he said.

JKC is paying for the completion of the project as it waits for the disputes to be resolved.

KBR said it would put $US507 million into the project to complete it by June 2019. This equates to a total of $US1.69 billion from the joint venture.

The company said it might have to contribute more than its share if a joint venture partner could not fulfil its obligations.

Chiyoda’s share price fell 46 per cent this week after problems on a US LNG project.

JKC is also claiming about $US1.9 billion from a consortium of companies that abandoned building the Ichthys power station in January last year.

The filing said JKC believed the consortium breached its contract and made it more difficult for others to complete the power station. Arbitration is set for early 2020.

JKC has handed over to Inpex all the plant at Darwin except the steam turbines of the combined cycle power plant.

Mr Bradie said final work would be slowed as it was now adjacent to a live LNG plant.

Faulty paintwork is another problem, with JKC and Inpex yet to agree on who is responsible and JKC taking proceedings against the paint manufacturer.

Ichthys was supposed to cost $US34 billion. Inpex declined to comment on whether the total cost could be kept within the latest $US40 billion cost estimate.

The legal morass comes at the end of an unusually complex project. Ichthys was funded by the largest-ever project financing deal, led by an inexperienced operator in Inpex, with a hybrid lump sum and reimbursable contract awarded to a joint venture.